Utility rate study in the works

August 8, 2012

ALPENA - The Alpena Municipal Council approved spending between $23,200 and $25,700 to hire Gosling Czubak to conduct a utility rate study, which when completed, will provide the council with a better idea on how the city's water and sewer rates are set and move forward in reaching a new agreement with Alpena Township for providing service.

City Engineer Rich Sullenger said it has been years since a study was done, and getting current information and data will help the city adjust rates if needed moving forward. The consultant also would review the expired agreement between the city and township to see if adjustments need to be made.

"Our documents show the last time we did a water and sewer rates was more than 30 years ago in the 1980s," Sullenger said. "We are dealing with another governmental agency in terms of an agreement. We want to have a third party, independent, look at the agreement from the city's perspective. We need to find out if this is a good agreement, is a poor agreement or is it an agreement we can live with with some modifications and tweaks. It is not something where we are taking care of Alpena Township and we have made that clear, but we want it to be a fair agreement for both parties."

A 30-year agreement was in place between the city and the township, but it expired recently. Mayor Matt Waligora said with a new agreement needed and questions surrounding rates he thought the time was perfect to have an expert research the issue.

"From my perspective, it seems like a necessity at this point and we have a need for it," Waligora said. "It has been in place for a long time and it will justify the cost we push onto our users. We also have a proposal from Alpena Power's Stephen Fletcher to purchase the system, so it really is a good time to get the data and information we need for several things."

Councilman Shawn Sexton said the price tag for the study was a little more than what he expected, but said that after comparing the bids the cost was in line with others who provide the same service. He said it is also important to have a professional opinion in place, should negotiations with the township break down.

"I wasn't happy about the price, but it is comparable with the others," Sexton said. "It was necessary to have done so we can check into our rates and be sure we have the data we need to negotiate with the city and justify them to the township. Right now the township has a rate attorney, so it is important we have our own expert should we end up in court. We want a fair rate for everyone. Who knows, maybe the results will show we are charging too much. I think that is unlikely, but you never know. We have had some of the lowest rates in the state for some time."